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Journalism of Courage
The recent tariffs imposed by the US on Indian imports had sent shockwaves among entrepreneurs – “Poore industry mein tension aa gaya tha (The entire industry was tense),” says Abhay Bhor, president of the Forum of Small Scale Industries’ Association. He adds that the announcement of GST reforms on September 4 has replaced the anxiety with enthusiasm.
“In Pune, we will see the startup sector and small manufacturers get an uplift. They are now in a stronger position to compete in the international market,” adds Bhor.
Pune district is home to 55,000-60,000 industries, from automobile, engineering, pharma, rubber, chemical, electronics and electrical to food, paint industries, and, to an extent, garments. The city’s automobile suppliers make auto parts for big companies, such as Bajaj.
Taxes have been slashed on household essentials, such as soap and toothpaste, to 5 per cent or nil, boosting affordability. There have been tax cuts on medicines and life-saving drugs, as well as farm machinery and irrigation equipment. Taxes have been cut from 28 per cent to 18 per cent on small cars and two-wheelers.
“Due to the overall tax cuts, the price of products will come down, which will increase consumer spending. As a result, the industries in Pune, as in the rest of Maharashtra, will be able to stabilise. After Covid, we saw an increase in the number of sick units. They were suffering due to intense international competition and GST, among others,” says Bhor.
“At least 35 per cent of industries closed in Pune and the rest of Maharashtra. We had requested help from the government to rehabilitate these industries. We asked them for provisions to start the industries,” he says.
Bhor adds that the closure of industries had caused unemployment among lakhs of people. “Add to this the electricity bill, which is higher than in Delhi. We also saw that due to a dearth of skilled workers, pharmaceutical companies had shifted to Gujarat. Other companies are making plans to shift. Now that the government has simplified Goods and Services Tax (GST) into a two-slab structure of 5 per cent and 18 per cent, we expect industry to grow in Maharashtra. We welcome the reforms,” says Bhor.
While companies supplying auto parts continue to pay 18 per cent GST, as before, there is relief because of the tax cut from 28 per cent to 18 per cent on automobile sales. “We are seeing that car-makers are reducing prices of cars, including SUVs. Sales of cars and two-wheelers are going to rise. We will get more workload. This is a positive effect that we are seeing from the reforms,” says Sandeep Belsare, President of the Pimpri Chinchwad Small and Medium Scale Industries Association.
Pune-based entrepreneur Vikas Mangani, who caters to the sugar and steel industries, says that they remain unimpacted—paying 18 per cent GST. “But the GST reforms will have a positive impact on the industry as a whole. There will be more liquidity in the market. Consumers who are going to buy a car or white goods are saving on GST. We will get a trickle-down effect in other industries as well,” he adds.
